Casino Enterprises (Pty) Ltd (Swaziland) v Gauteng Gambling Board (91/07) [2008] ZASCA 31 (28 March 2008)

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[2008] ZASCA 31
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Casino Enterprises (Pty) Ltd (Swaziland) v Gauteng Gambling Board (91/07) [2008] ZASCA 31 (28 March 2008)

IN THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
NOT
REPORTABLE
CASE NO
91/07
In the
matter between
CASINO ENTERPRISES (PTY) LTD
(SWAZILAND)
Appellant
and
THE GAUTENG GAMBLING BOARD
Respondent
CORAM: HOWIE P, MPATI DP, NUGENT
JA, HURT et SNYDERS AJA
Date Heard: 7 March 2008
Delivered: 28 March 2008
Summary: Exception
to claim – excipient not accepting plaintiff’s facts but
advancing contradictory facts on which to base averment
of absence of
crucial allegation in claim.
Neutral Citation:
This judgment may be referred to as
Casino Enterprises
(Pty) Ltd (Swaziland) v The Gauteng Gambling Board
(91/07)
[2008] ZASCA 31
(28 March 2008).
_
_______________________________________________________________________
J U D G M E N T
________________________________________________________________________
HOWIE P
HOWIE P
[1] The long-running dispute between the parties in this
appeal requires, and will hereafter hopefully receive, expeditious,
practical
and effective disposal. Unfortunately that outcome cannot
be achieved by way of the legal process according to which the matter
has
come to this court.
[2] The appellant is a Swaziland company which operates
an internet casino. The casino is licensed in Swaziland but not in
South Africa.
To attract gamblers in Gauteng the appellant advertised
the casino on radio stations broadcasting in that province. The
Gauteng Gambling
Board (the Board) warned the broadcasters to desist
as the advertisements, being in respect of an unlicensed casino, were
in contravention
of Gauteng and national legislation.
1
In compliance, the broadcasters withdrew the
advertisements and refused to air any more.
[3] The appellant’s response was to apply on motion to
the High Court at Pretoria for an order declaring, in effect, that
when Gauteng
gamblers patronise the casino their gambling occurs in
Swaziland so that neither such gambling nor advertising it
contravenes the
legislation.
[4] The application was launched in the Pretoria High
Court in October 2004. It cited the Board as first respondent. (The
other respondents
do not feature in the litigation.) The Board
opposed.
[5] In their papers both sides put up affidavits
containing expert technical explanations as to the workings of
internet gambling
in order to motivate their respective experts’
opposite conclusions as to whether the online gambling process took
place solely
in Swaziland or at least partly in Gauteng. In view of
this conflict of opinion the appellant moved for referral to trial,
the founding
affidavit to stand as a simple summons. That was
granted.
[6] Shortly afterwards the appellant’s declaration was
filed. It contains the following paragraphs.
‘
9. In terms of the Provincial Act, and
particularly section 71(1) thereof, advertising for gambling in the
Province is prohibited
unless the advertiser holds a valid gambling
licence in terms of the Provincial Act.
The gambling that takes place at the plaintiff’s on-line casino:
does not take place in the Province; and
is not required to be licensed in terms of the Provincial Act.
11. Accordingly, the provisions of the Provincial Act do not prohibit
any activities in the Province in respect of gambling at and
on the
plaintiff’s on-line casino, and the advertisement thereof within
the Province is also not prohibited in terms of the Provincial
Act.
12. In terms of the National Act no person may, among other things,
engage in or make available an interactive game except as authorised
in terms of the National Act or any other national law, nor may any
person advertise or promote any gambling activity in a false
or
misleading manner or in a manner that is unlawful in terms of the
National Act or applicable provincial law.
13. Gambling at the plaintiff’s on-line casino:
13.1 is not an interactive game as contemplated by the National Act;
13.2 does not take place within the Republic of South Africa; and
13.3 is not unlawful in terms of the National Act or the Provincial
Act.’
[7] The gist of the Board’s exception is that the
appellant’s activities, to be lawful, require a casino licence
issued under
the National Act or the Gauteng Act and that the
appellant fails to allege that it has such licence. The need for such
licence is
explained in the notice of exception as follows:
‘
16. The premises in the Republic to which
the-on-line-casino games are disseminated, and made available for
play, do not, and the
plaintiff does not allege that the premises
concerned, constitute licensed premises in terms of the National Act
and the Provincial
Act.’
[8] Contrary to what is required of an excipient, the
Board does not accept the appellant’s factual allegations. Instead,
it impermissibly
raises a factual allegation of its own which
contradicts the tenor of the appellant’s case and then, on the
strength of that contradictory
allegation, proceeds to aver the
omission by the appellant of an allegation allegedly essential to its
claim. But there it errs again.
The appellant’s case is that it has
no South African licence because it needs no such licence. It cannot
be an adequate, much less
decisive, legal answer to say that the
appellant’s claim is bad because it fails to allege what it
specifically contends is unnecessary.
[9] Despite these errors of approach the board’s
exception succeeded. The declaration was set aside and leave to file
an amended
declaration was afforded. The appeal is with leave of the
court below.
[10] In his judgement the learned Judge in that court
(Hartzenberg J) said this:
‘
[21] It has already been emphasized that the
plaintiff’s case is that it operates an on-line casino in
Swaziland. That is accepted.
It wants a declaratory order that “to
the extent that gamblers in the Province of Gauteng gamble on the
plaintiff’s on-line casino”
the gambling takes place in Swaziland
and not in the Province. The fallacy with the argument is that if
nothing happens in the Province,
there is nothing that the court can
sanction. There would therefore be no need for a declaratory order.
It follows in my view that
the plaintiff requires the sanction of
gambling actions within the borders of the Province. Likewise it
requires the sanction of
advertisements in the Province to promote
gambling in the province. It does not allege that it has a South
African licence to do
so. The two Acts make it abundantly clear that
it cannot do so without a licence. It therefore requires of the court
to declare actions
legitimate which the legislature has prohibited. I
agree fully with what was said by du Plessis J in the unreported
matter of
Otherchoice (Pty) Ltd v
Independent Communications Authority of SA and Another,
Case no 19718/2003 in this division where he came to the conclusion:
“
By requiring a person who renders a service in
this country to be licensed albeit that that person is in a foreign
country while rendering
the service, our legislature is not
prescribing to that person what he or she may do in the foreign
country. The legislature is prescribing
what the effect of what the
person does may be in this country.”
[11] Then, having earlier referred to the definition of
‘interactive game’ in the National Act,
2
the Judge proceeded:
‘
[22] I also do not agree with Mr Ginsburg that
it is not possible to decide whether the plaintiff’s actions fall
within the purview
of section 11 of the National Act in that one does
not know if it is an interactive game or not. An interactive game is
played or
made available over the internet on premises which are not
licensed through a computer program or similar device. That is
exactly
what the plaintiff alleges that it makes available to
gamblers in the Province. On that basis also the plaintiff fails to
lay a basis
that it has a cause of action for the relief it claims.’
[12] I do not agree, with respect, that if no part of
the appellant’s online gambling process occurs in Gauteng there is
no need
for a declarator. It was the parties’ conflicting views
that prompted the appellant to seek an order declaring that its
activities
do not contravene the legislation. If its factual
allegations are correct it is entitled to such a declarator. Counsel
for the Board
correctly conceded as much. In the circumstances there
was no point in giving the appellant the opportunity to amend its
claim for,
on the facts alleged, no amendment was necessary or
feasible.
[13] The court’s reasoning seems to rest on an
unexpressed inference that some of the appellant’s gambling process
must take place
in Gauteng because that is where the process is made
available.
3
However, the appellant’s factual allegations – on
which the exception had necessarily to be decided – do not justify
that inference.
[14] Finally, it is plain that the appellant certainly
does not allege that it makes an interactive game available in
Gauteng.
[15] It follows from what I have said that the findings
of the court below in favour of the Board are not supportable.
[16] Counsel for the Board sought nevertheless to argue
that s 71(1) of the Gauteng Act prohibited advertisement of the
appellant’s
casino even if its relevant activities occurred wholly
outside the province. That argument cannot prevail. The subsection
reads:
‘
No person shall, by way of advertisement or
with intent to advertise, publish or otherwise disseminate or
distribute any information
concerning
gambling in the Province
in respect of
which a licence in terms of this Act is not in force.’ (My
emphasis.)
In the first place the words underlined plainly convey
that what may not be advertised is unlicensed gambling in the
province; they
qualify gambling, not advertising. Secondly, the aim
and object of the Act is to control gambling within the province, not
elsewhere.
Nothing in the Act suggests that the provincial
legislature had any interest or concern in barring the advertising of
foreign gambling,
the conduct and control of which would obviously be
beyond its legislative reach.
[17] The appeal must therefore succeed. It remains to
say, however, that there is a realistic prospect that evidence could
well establish
that at least part of the online gambling process in
question takes place in Gauteng. It was no doubt this prospect that
influenced
the learned Judge to attempt to resolve the matter on the
basis of what he saw as the likely factual position, without the
procedural
constraints of an exception. What requires determination
is the factual question as to how the plaintiff’s system is made
available
to gamblers in Gauteng and what acts they perform in the
province in order to use the system.
[18] Whether the further litigation should necessarily
involve a trial, one is inclined to doubt. To judge by the affidavits
on record
there seems to be no likely dispute between the expert
witnesses as to the manner in which the gambling system functions.
The dispute
seems rather to be whether players who engage in the
activity can be said to be ‘gambling’ within the province. That
is not a
matter for the opinion of experts but is rather a matter for
a court to decide by construing the meaning of that term in the
legislation.
It would seem to be a practical expedient to explore the
possibility of a joint report from the experts as to the facts and,
in the
event of their being agreed, to compile a stated case on the
basis of which argument on the legal issues can be properly informed.
[19] The parties are agreed that they seek no costs
order in either court whatever the result of the appeal.
[20] The order is as follows:
1. The appeal is allowed.
2. The order of the court below is set aside and
substituted for it is the following:
‘
The exception is dismissed.’
_____________________
CT HOWIE
PRESIDENT
SUPREME COURT OF APPEAL
CONCUR
:
MPATI DP
NUGENT JA
HURT AJA
SNYDERS AJA
1
The
Gauteng Gambling Act 4 of 1995 and the
National Gambling Act 7 of
2004
.
2
The
definition reads: ‘‘interactive game’ means a gambling game
played or available to be played through the mechanism of
an
electronic agent accessed over the Internet other than a game that
can be accessed for play only in licensed premises, and only
if the
licensee of any such premises is authorised to make such a game
available for play.’
3
Section
8 of the National Act makes it unlawful, without a licence to
‘engage in, conduct or make available’ a gambling activity.